This Analyst Believes Ethereum May Lose 80% Of Its Value


According to the post Bloomberg articleJohn Roque of 22V Research believes that Ethereum could drop to $420, a loss of 80% of its current price, and here’s why.

Ethereum could drop 80%

The trader believes that Ethereum, which is currently trading at $2000, is about to break through the support area and is likely to drop below $420. Roque drew attention to the $3,580 high and $2000 low price range.

With Ether dropping below $2000, it is no longer within the predetermined range and will start to decline to the next important chart support around $420.

Source: 22v Research

As the second largest cryptocurrency is rapidly losing value, it has fallen below all the moving averages, including the 50, 100 and 200 day lines. The downward movement of the above-mentioned indicators is an important bearish factor for any asset.

According to Roque, Ethereum is also oversold on both the weekly and daily charts, which is why it cannot go higher in the foreseeable future.

ETH/USD trades aroun $2k. Source: TradingView

While the analyst claims that Ethereum has surpassed key support levels for the second largest cryptocurrency in the market, it may still be seen. On the weekly chart, for example, traders should still test the 200-week average support.

Related reading | Bitcoin Index hits historic low not seen since 2015

High supply of Ethereum exchange

Santiment, an on-chain data provider, gives us an insight into the upcoming Ethereum (ETH) price movement. On the 8-hour chart, large Ethereum shorts have accumulated at $2,000, according to the data provider.

However, according to Santiment, this usually doesn’t work with the shorter ones, and a short squeeze is likely. As a result, the price of Ethereum may rise again.

raised

Data shows funding rates history. Source: Santiment

Another element to consider is the ETH exchange offer. Santiment notes:

“While we have seen a nice decrease in supply on the exchanges over the past year or so, May 1, 2022, has seen a huge increase in supply on the exchanges as people rushed out of their positions, which is clearly reflected in the price itself.”

As a result, any future increase in the supply of exchange will lead to another decrease. This indicates that investors panicked and gave up completely. Although the situation seems dire, it could be an excellent time to fill in new roles.

Related reading | Ethereum Hashrate Breaks All-Time Highs, Does Price Follow?

Featured image from iStockPhoto, Charts from TradingView.com



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